University administration announces opposition to pension bill

By Eleanor Black

The University has announced its opposition to a pension bill that administrators say will put the University at a “competitive disadvantage.”

The bill, which will cut pension benefits for state employees, aims to address the worst state credit rating in the country and will be discussed at a Tuesday meeting of the General Assembly.

University President Robert Easter, along with the chancellors of all three campuses, signed an email to University faculty Monday. The email stated that they “are profoundly disappointed that in nearly three years of engaging the legislative process on this crucial issue, the state’s nine public universities’ counterproposals will not be included.” 

State lawmakers agreed on the proposal last week after years of discussion in an attempt to fix the state’s pension system that faces an estimated deficit of more than $100 billion. Under the proposal, state employees will lose a number of benefits. Using 10 percent of the money saved from these cost-cutting measures, as well as annual payments of $364 million in Fiscal Year 2019 and $1 billion from Fiscal Year 2020 to 2045, the state will fully fund the pension system by Fiscal Year 2044.

Professor Harriet Murav, president of the Campus Faculty Association, said the bill would have a negative impact on faculty recruitment at the University. In April, the Urbana campus announced plans to hire 180 employees this year and 500 new employees over the next five years.  

Murav said the University wants to recruit not only those in early stages of their careers, but also those in advanced stages of their careers. She added that a disadvantageous pension plan would not attract potential employees who are planning for their retirement. 

“When you’re in the middle of your career, one of the first questions you ask about a prospective place of employment, ‘Well, what’s the pension like? How will I be able to plan not only for my child’s college education, but for my own retirement?’” she said. “If they can’t plan for their family’s future, they’re not going to want to come here.”

Murav said the plan would not only affect potential faculty, but it would also affect current employees at the University. Under the proposed changes in the bill, a salary cap of $109,971 will be placed on all faculty. She said prestigious faculty who have made significant contributions to the University who make more than the cap will not be given a fair pension in return.

In its September report, the Task Force on Faculty Concerns and Issues said the Urbana campus does not pay its faculty members as well as its competition. The campus ranks 16th out of four-year public universities in average full professor salary with $141,000. 

Even ranking 16th, these faculty members make more than the proposed pension salary cap. Currently, the University system has 2,984 faculty members above the cap. This salary cap already exists for new hires.

“The faculty who are at the top of the pay-scale, the most prestigious faculty who bring in lots of grant dollars and are very accomplished and do a lot for the University, whether it’s in the form of their scholarship or the grants, those people will have a cap put on the income that can be used as the basis for their pension,” Murav said.

Aside from the major effects the pension bill would have on state employees, Murav believes it will affect everyday life for retirees. 

Under the bill, all employees will miss cost-of-living adjustments on their annuities based on age, with younger employees missing more adjustments. 

“The cost of living adjustment that the reform proposes will not keep up with the cost of inflation. So that when the price of gas changes, foodstuffs, medicine — all those things that you need when you’re a retired person — your pension isn’t going to keep up with increased costs, and you’re going to have a severe loss in your quality of life,” Murav said. 

Ricky Baldwin, chief negotiator of the Service Employees International Union, Local 73, which represents about 800 University service employees, said the overhaul unfairly pins the costs on government employees and not the government itself.

“It is the employer that has not paid their share, and now they’re asking the employees to pay more to cover the employer’s share that wasn’t paid. That’s wrong,” he said. “You’re taking it away from people who’ve already done their work all with the understanding that they would have that retirement.”

Austin Keating, Johnathan Hettinger and Maggie Huynh contributed to this report.

Eleanor can be reached at [email protected]